WORKING CAPITAL MANAGEMENT PRATICES OF SACHET WATER PRODUCERS IN THE KUMASI METROPOLIS

Abstract

In a developing economy like Ghana, the contribution of small firms to the employment of the youth is highly recognised. Small firms employ a greater number of people in the country but their contribution towards revenue to the national budget seems negligible. The reason is that some of the firms do not manage their working capital as expected and this affects the viability of businesses. The objective of this study looked at the working capital management practices of sachet water producers in the Kumasi Metropolis. The study looked at the cash management practices (use of surplus cash, qualification of accounts officers and use of computers), inventory management (policies to determine inventory levels and production levels) and trade receivables management (credit sales, debt collection period and credit control policies) practices of the sachet water producers. The study used both questionnaires and semi-structured interviews to investigate fifty sachet water producers from members of the sachet water association in the Kumasi Metropolis.